Auction Reaction
U.S. Treasuries trade on their highs, market found support once the belly briefly returned to little changed. With the recent push, the 10-yr yield is now back at its 50-day moving average (4.423%) while the 30-yr yield is now only slightly above its low from May (4.917%).
Treasuries are holding at highs in immediate reaction to today’s $13 bln 20-yr bond reopening, which met solid demand. The sale drew a high yield of 4.927%, which stopped through the when-issued yield by a basis point while the bid-to-cover ratio (2.75x vs 2.65x average) and indirect takedown (71.6% vs 64.3% average) were above average.
Yields:
2-yr: -3 bps to 4.04%
3-yr: -3 bps to 4.08%
5-yr: -4 bps to 4.15%
10-yr: -4 bps to 4.43%
30-yr: -4 bps to 4.93%
Treasury Auction Results
$13 bln 20-year Treasury bond reopening:
High yield: 4.927% (When-Issued: 4.937%)
Bid-to-cover: 2.75
Indirect bid: 71.6%
Direct bid: 19.9%
Desk Rating A-